VAH - Virgin Australia Holdings

[Dona Ferentes]

There is every likely hood that private equity will pick up Virgin, strip it back to bare bones and continue operating as a low cost national airline.

and give up international pretensions

 

[investtrader]

A few months back I used a bunch of Virgin points to book two business class return flights to he UK for me and the wife, the actual flights are on Etihad (partner airline).

I might have some interesting times ahead seeing how this pans out, eg if virgin goes bust are my flights on Etihad still valid??? and if I have to cancel or refund due to restrictions will if be possible if the Virgin points program no longer exists???

Hopefully if Virgin go belly up Etihad still honour the flights and issue credits or rebooking if I have to cancel.

I really hope virgin make it through this thing.

I don't see any hope for getting anything for your points or from booked flights. I lost 1 million points when Ansett when broke and will burn 400k from Virgin for booked flights. I only transfer points in now just before booking flights, but that didn't work

 

[Dona Ferentes]

Not sure about the Velocity business. All you can assume is the status of any points is being devalued.

Last November, Virgin Australia Holdings raised $750mill to fund its full recapitalisation of Velocity Frequent Flyer biz. The VAH notice says the FF company, while fully owned by the Virgin Group, is not in administration.

 

[Dona Ferentes]

Your right Dona, this post from August last year, the losses were mounting up over a long period and a lot of smoke and mirrors seemed to be happening.

Sadly the smoke and mirrors are entanglements.... (Ansett took a decade to unwind)

 

[Value Collector]

I don't see any hope for getting anything for your points or from booked flights. I lost 1 million points when Ansett when broke and will burn 400k from Virgin for booked flights. I only transfer points in now just before booking flights, but that didn't work

hopefully My booked flights are still valid, because I am actually booked on Etihad, not an actual virgin flight.

but I guess anything can happen.

 

[Miner]

If the Chinese get full ownership, Qantas would have to watch out, the Chinese have very deep pockets.
They could subsidise a price war to put Qantas out of business, with the loose change in the ashtray.

Honestly the way we are sold out to two countries :

1. USA to say yes everything they do or say , unlike our neighbor NZ who is always independent and seen to be doing good things first.
2. Relying on every thing on China to close our strength on manufacturing excellence and instead just short time gain on selling unprocessed stocks (what a stupidity on to lose the value addition on products made here and trying to control wages learning from the wage rate in USA and Canada - for reference I have worked both the countries as well so sharing from first hand experience). If China sneezes we get cold and alike. Unless we do some filtering on Chinese invasion through buying crippling plants, showing them loss making so tax is missed, selling the Chinese owned mines products to their own countries and also commanding pressure on Australian government.Our education system is greedy to get overseas students fund and letting our own children not to be focussed on getting education leaving higher skilled jobs to overseas personnel by just importing them.
3. Our visa system to get work permit is so simple compared to get the same in USA or CANADA so that they can keep the jobs in country first.
4. Days are not very far that we would surrender the judiciary and administration to people indirectly sponsored by PRC and becoming too late to correct. See London, what happening there. Poms are here and who are there to run London ???
5. Just wait for not just Chinese speaking Kevin Rudd but some one like a China born PM in near distant - again too late then.

Let me submit, I am posting for longer vision of the country and not trying to support Palmer, Hanson or Lamby's political agendas.

1. I am not giving any political tangent here but showing how we are failing to get

 

[Colm Doc]

Qantas (incl Jetstar) is the only direct competitor so presumably the answer would be yes.

That said, if there's still some community concern about being in confined spaces (eg aircraft) and assuming Qantas puts its fares up then I'd expect at least some increase in people driving interstate. Not likely a huge number but rationally there'd be some who are what I'll term "marginal flyers" and they'll decide to steer clear of planes for a while probably.

Other than that, well the only other option is trains or buses where they operate on the same route or for Vic - Tas going by sea. Using those is normally not really a direct competition to air travel though. People who go by train are usually people who like trains. People who cross Bass Strait by ship are usually doing so because they're taking a vehicle. Neither could really be seen as direct competition to the airlines for the majority of passengers.

Will all of this make Qantas share holders happy or is it big trouble for all?

 

[Boggo]

Will all of this make Qantas share holders happy or is it big trouble for all?

Could go either way Doc depends on whether the (potential) new owners take on Qantas or if they see an opportunity and also exploit as a way of finally making a profit.

 

[sptrawler]

It will be interesting to see who's ideology works? Live by the sword and all that, labor throw money at it, Coalition let the market sort it.
It's a shame Virgins owners aren't confident, to stump up the money.
https://www.abc.net.au/news/2020-04...bailout-what-the-government-has-said/12169952
Labor:
Opposition Leader Anthony Albanese said the Federal Government should intervene because it was the decision to protect Australians' health that put Virgin Australia in this situation.
Coalition:
Treasurer Josh Frydenberg said "This is an opportunity for the company to recapitalise and come out stronger on the other side of the coronavirus crisis."
Mr Frydenberg added that the Government was committed to a "market-led solution"

 

[Smurf1976]

Will all of this make Qantas share holders happy or is it big trouble for all?

If someone bought Qantas shares at the beginning of the year then at the moment they've lost half their money. At least the company is still operating and isn't under administration but they've still got a lot of problems.

Air travel has collapsed to the point that even if Qantas did gain a 100% market share, that still means very few paying customers and there's the problem. Likewise if Qantas had gone bust then that wouldn't of itself have likely been enough to save Virgin.

Investing in any airline at this point is basically speculating on there being a recovery in air travel demand and that consumers can and will pay fares high enough to make the airlines profitable. As it stands now, neither are profitable businesses - it's just that Virgin ran out of money first but Qantas won't last forever without planes in the air and paying passengers in them.

 

[Dona Ferentes]

and presently, only can fill to 2/3 capacity. Physical separation means the middle seat in each aisle is vacant.

So either tix rise 50% or the ability to make a buck above fixed costs is impaired. Luckily Jet A1 is cheaper (but didn't they hedge forward a while lot?)

 

[sptrawler]

Investing in any airline at this point is basically speculating on there being a recovery in air travel demand and that consumers can and will pay fares high enough to make the airlines profitable. As it stands now, neither are profitable businesses - it's just that Virgin ran out of money first but Qantas won't last forever without planes in the air and paying passengers in them.

Investing in an airline at any time is a seat of the pants investment IMO.
Very much an in and out gamble on short term volatility, IMO, a plane falls out of the sky and the shares take a hit, fuel price goes through the roof, their shares take a hit. Very shaky underpinnings from my perspective, so many things can affect their bottom line.
Just my opinion.

 

[Colm Doc]

Could go either way Doc depends on whether the (potential) new owners take on Qantas or if they see an opportunity and also exploit as a way of finally making a profit.

Thanks, I’ve put in a low offer for Qantas and now thinking about canceling

 

[Colm Doc]

If someone bought Qantas shares at the beginning of the year then at the moment they've lost half their money. At least the company is still operating and isn't under administration but they've still got a lot of problems.

Air travel has collapsed to the point that even if Qantas did gain a 100% market share, that still means very few paying customers and there's the problem. Likewise if Qantas had gone bust then that wouldn't of itself have likely been enough to save Virgin.

Investing in any airline at this point is basically speculating on there being a recovery in air travel demand and that consumers can and will pay fares high enough to make the airlines profitable. As it stands now, neither are profitable businesses - it's just that Virgin ran out of money first but Qantas won't last forever without planes in the air and paying passengers in them.

Thanks, I may have to rethink about an offer I made.

 

[sptrawler]

A very good write up on the Virgin situation, as I said earlier maybe Australia hasn't got a big enough population for two major airlines, IMO it is the same reason Kaufland decided to pull the pin on Australia.
https://www.abc.net.au/news/2020-04...ustralia-cannot-sustain-two-airlines/12169620

Australia is a great Country and punches way above its weight in the first World, but it still only has a population of 25million, it isn't a big marketplace.
We think we are a big dog in the scheme of things, but in reality we are a Jack Russell, Stubborn, Fearless, Intelligent, Energetic, Athletic, and Vocal, but very small.
Just my opinion and I do like Jack Russell's, had to put mine down last year.

 

[Colm Doc]

A very good write up on the Virgin situation, as I said earlier maybe Australia hasn't got a big enough population for two major airlines, IMO it is the same reason Kaufland decided to pull the pin on Australia.
https://www.abc.net.au/news/2020-04...ustralia-cannot-sustain-two-airlines/12169620

Australia is a great Country and punches way above its weight in the first World, but it still only has a population of 25million, it isn't a big marketplace.
We think we are a big dog in the scheme of things, but in reality we are a Jack Russell, Stubborn, Fearless, Intelligent, Energetic, Athletic, and Vocal, but very small.
Just my opinion and I do like Jack Russell's, had to put mine down last year.

Yeah, love Jackie’s too! And can see the comparison but what do you think about Qantas in all this??

 

[sptrawler]

Yeah, love Jackie’s too! And can see the comparison but what do you think about Qantas in all this??

A few years ago I bought Qantas at about $1,but sold them as soon as there was a reasonable profit, Qantas is a quasi Government airline, same as the big 4 banks are semi government institutions so relatively safe.
But having said that they will never set the world on fire, it depends what you are after, income or capital gains.
The other problem with airlines I've already mentioned, exposure to fuel, people's affluence and disasters eg fall out of the sky.
So it isn't my bag, unless it's an absolute bargain and I'm using play money to buy them.
Just my opinion.

 

[sptrawler]

The short list of suitors for the carcass is finalised.
https://www.abc.net.au/news/2020-05...uitors-to-take-over-virgin-australia/12258458
ABC News can confirm the shortlist contains four bidders: private investment firm Bain Capital, private equity firm BGH Capital, US aviation investor Indigo Partners and global investor Cyrus Capital Partners.

 

[Colm Doc]

The short list of suitors for the carcass is finalised.
https://www.abc.net.au/news/2020-05...uitors-to-take-over-virgin-australia/12258458
ABC News can confirm the shortlist contains four bidders: private investment firm Bain Capital, private equity firm BGH Capital, US aviation investor Indigo Partners and global investor Cyrus Capital Partners.

Do you think the Queensland government should have a stake in an airline?

 

[sptrawler]

Do you think the Queensland government should have a stake in an airline?

The problem is the ACCC has stated they want a full service airline, not a State airline, having a State Government as a minority shareholder doesnt make sense, they would be in a compromised situation stumping up taxpayers money and possibly losing the lot.
It would be like the Victorian Government, taking a minority stake in Holden and Falcon, to try and save Victorian jobs.
If Qantas folded as well I would expect the Federal Government to take a majority shareholding, but in reality Governments cant prop up every company, in the name of competition.
It would be different if there was no other service provider, then it is the Goverments responsibility to provide the service.
Just my opinion.